By Drs. Robert and Sonia Vogl
President and Vice President
Illinois Renewable Energy Association
The recent U.S. extension of the 30 percent tax for solar energy along with the 2.3¢/kWh production tax credit for wind power are expected to simulate the growth of these renewable energy sources through 2020. The EPA Clean Power Plan introduced in August of 2015 set ambitious goals for reducing carbon pollution from power plants 32 percent below 2005 levels by 2030. Retiring old coal-burning plants will also cut sulfur dioxide releases along with other emissions which adversely impact the environment and human health. These actions are included in voluntary reductions the United States pledged to undertake at the recent international conference on climate change in Paris.
While wind power costs are dropping the costs of solar projects are falling dramatically. Berkshire Hathaway has contracted to buy electricity from First Solar’s Playa Solar 2 Utility scale project in Nevada for only 3.87¢/kWh over 20 years. Wood Mackenzie has predicted that the solar industry could be poised for a major breakthrough that could match the scale of shale developments in the U.S. over the last few years.
As coal-fueled power plants close they are being replaced by natural gas-fueled power plants. Natural gas is the world’s fastest growing primary energy resource, currently accounting for 24 percent of global primary energy. According to the U.S. Energy Information Administration natural gas consumption is expected to increase 50 percent by 2040. Its low price has accelerated its replacement of coal for power production.
While natural gas combustion releases roughly half the carbon of coal, the switch from coal to natural gas is not as clean as it appears to be based solely on carbon reductions. Some studies have pointed out that the release of methane during drilling for gas and its subsequent shipment offset the benefits of lower carbon releases. Methane gas is a far more powerful contributor to climate change than is carbon.
The fossil fuel industry has projected the expansion of consumption through 2050 and beyond while some climate change advocates recommend that 80 percent of the existing fossil fuels remain in the ground. A report from Carbon Tracker indicates over $2 trillion worth of fossil fuel assets are at risk if the global community sticks to the goal of limiting the global temperature increases to 2 degrees celsius. Since the development of fossil fuel holdings necessitates substantial amounts of capital, investors may be unwilling to invest in such projects, leaving them as stranded assets.
While operating nuclear power plants have few if any carbon releases, it is unclear at this time whether their role in avoiding carbon releases will be included in carbon reduction plans.
While the need to limit carbon emissions is widely acknowledged, whether appropriate, timely actions are implemented remains to be seen. Along with passing legislation to extend renewable energy credits, the ban on exporting oil from the United States was lifted. This could open the door to exporting fracked oil and gas and tar sands oil to Europe if the Transatlantic Trade and Investment Partnership is enacted.
By installing a solar system individuals can give a clear signal to others as to where they stand.